The Federal Home Loan Bank Board has dropped its long-simmering objections to the compensation of Columbia Savings & Loan Chief Executive Thomas Spiegel, keeping intact his current and previous pay for the last three years, both parties said Wednesday.
The settlement, which was expected, ends a 2-year-old dispute that had clouded Spiegel's status as the nation's highest-paid savings and loan executive and one of the highest paid in any industry.
The settlement, Columbia officials said, came after the firm submitted Spiegel's 1987 and 1988 pay packages to review by an independent compensation consulting firm. As has been reported, the consulting firm, Towers, Perrin, Forster & Crosby, recommended a cut in Spiegel's 1988 base salary, along with other changes that were adopted.
$9-Million Pay Package
The settlement, Columbia said, also reflects a change in attitude at the bank board toward the controversial thrift, which is viewed as an industry maverick because of its heavy investments in high-yield "junk bonds."
"The regulators view our institution much more positively today than a few years ago," Spiegel, 41, said in an interview. "We don't believe high-yield bonds carry any stigma today with the bank board, whereas they did a few years ago."
Lorna Thompson, spokeswoman for the Federal Home Loan Bank of San Francisco, confirmed that the agency has dropped its objections to Spiegel's pay. But she declined to comment further.
The dispute began in April, 1986, when the bank board challenged Spiegel's $9-million pay package in 1985 as excessive. That package included a deferred $5-million payment into a special retirement fund.
The bank board, which regulates the nation's S&Ls, threatened to order Columbia's board to pay Spiegel only his $960,000 annual base salary. However, the threat was never carried out, and the matter has been the subject of off-and-on negotiations for the past two years.
Spiegel subsequently received packages of $4.38 million in 1986 and $5.46 million last year, including bonuses and retirement plan contributions as well as his $960,000 base salary. Last year, Spiegel also exercised stock options worth up to $4.1 million.
However, for 1988, his base salary was cut to $750,000 at the recommendation of the Tower Perrin consulting firm. He also was given a special incentive pay plan linked in part to the performance of Columbia's stock.